HSBC Bank (China) has received a license from the China Financial Futures Exchange (CFFEX) to offer futures margin depository services to qualified foreign institutional investors (QFIIs).
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According to The Asset – Magazine, the license will allow the bank to become a futures margin depository bank (FMDB), which will be the first foreign bank in the mainland.
The publication quoted Andy Ng, head of HSBC Securities Services in China, saying: "This license allows us to further enhance our services for QFIIs and RQFIIs, helping them simplify the procedure for trading index futures, increase efficiency in clearing and lower the risks in margin management and deposit outflows."
Under CFFEX’s regulations, margins for futures trading among investors, futures brokers and exchanges are required to be deposited and cleared through a FMDB.
After CFFEX introduced administrative measures in August for the QFIIs’ custodian banks to apply for licenses to provide margin depository services, HSBC China was the first foreign bank in the mainland to apply for and subsequently receive the license.
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By GlobalDataAs of October 2013, HSBC China was the custodian bank for US$15.9 billion of investment quota for QFIIs, which was equivalent to 34.4% of the total amount approved.
It was custodian bank for RMB49.6 billion investment quota for RQFIIs, which was equivalent to a dominant 37.2% of total amount approved.
